Business Horizons (2005) 48, 535 — 545 www.elsevier.com/locate/bushorPositioning Southwest Airlines through employeebrandingSandra Jeanquart Miles*, W. Glynn MangoldDepartment of Management, Marketing, and Business Administration,College of Business and Public Affairs, Murray State University, Murray, KY 42071, USA KEYWORDS Abstract As the field of employee branding has begun to unfold, more and more Employee branding; executives have become interested in how this process can help them achieve a Internal marketing; competitive advantage for their organizations. This article explains how employee Psychological branding works and how it can be utilized to position the organization in the minds of contracts; customers, employees, and other stakeholders. A contextual analysis of its use as a Competitive source of sustainable competitive advantage at Southwest Airlines is presented. advantage; Finally, key success factors are identified for those who wish to make employee Southwest Airlines branding a strategic focus within their organizations. D 2005 Kelley School of Business, Indiana University. All rights reserved.1. Employee branding and Southwest desired brand image and are motivated to projectAirlines: A winning combination the image to customers and other organizational constituentsQ (p. 68). The conceptualization pre-Employee branding as a source of strategic com- sented along with this definition provided insightpetitive advantage has been a basis for discussion in into how organizations could achieve a competitiverecent years. While practitioners focused on the advantage by strategically utilizing the employeeimportance of employee branding and its positive branding process.outcomes, their discourse often lacked focus be- In this work, we extend our previous conceptu-cause they did not agree on the term’s definition or alization by presenting a contextual analysis ofits conceptualization. Clarity was added when our Southwest Airlines’ use of the employee branding2004 Journal of Relationship Marketing article process to gain an organizational bpositionQ in the(Miles & Mangold, 2004) defined employee branding minds of customers. Our extension also acknowl-as bthe process by which employees internalize the edges the key role the organization’s mission and values play in the employee branding process, and recognizes that employees must have knowledge of T Corresponding author. the desired brand image if they are to project that E-mail addresses: firstname.lastname@example.org (S.J. Miles)8 image to others. This analysis will lead to a email@example.com (W.G. Mangold). understanding of the use of employee branding as a0007-6813/$ - see front matter D 2005 Kelley School of Business, Indiana University. All rights reserved.doi:10.1016/j.bushor.2005.04.010
536 S.J. Miles, W.G. Mangoldpositioning tool, and will clarify the manner in benchmark for organizations in which managerialwhich the employee branding process can be used attention is focused on the use of employee brandingas a source of competitive advantage. to gain a competitive advantage. In the United States, Southwest Airlines has, bymost measures, been the most successful airline inits industry. This success is largely due to the 2. The employee branding processcompetitive advantage Southwest has gained byeffectively positioning the organization in custo- The employee branding process enables the orga-mers’ minds. Its organizational position has mainly nization to consistently deliver its desired brandbeen achieved through its human resource prac- image to customers, thereby solidifying a cleartices, most of which fall under the rubric of position in the minds of customers and employeesemployee branding. The receipt of the 2003 alike. When done well, it provides a competitiveKozmetsky Award for Branding Excellence and the advantage that is achieved through employees,2004 Performance Through People Award provides who have internalized the desired brand imageevidence of the effectiveness of Southwest’s posi- and are motivated to project that image totioning and employee branding strategies. Other customers and other organizational constituents.notable achievements and recognitions of South- The employee branding process is represented inwest’s success are outlined in Table 1. Fig. 1. As the model indicates, the organization’s In a personal interview with the authors, Colleen mission and values are the cornerstones of theBarrett, President and Chief Operating Officer, process: they state the organization’s reason forattributed Southwest’s success to its employees. being and give insight into the manner in which theFrom a conceptual perspective, however, it may be mission is to be accomplished. An organization’smore accurate to say that Southwest’s success mission and values provide a foundation by whichappears to be largely founded on a complex process the desired brand image is defined.by which the company motivates employees to Messages transmitted within the organizationinternalize and deliver the desired brand image. should clearly convey the organization’s mission,This motivational process is principally rooted in the values, and desired brand image. They should alsoconcept of employee branding. The outcome is communicate the behaviors and attitudes thereadily observed by those who come into contact organization deems important and expects fromwith Southwest employees, and contributes heavily employees. Perhaps most importantly, the mes-to the position Southwest holds in customers’ minds. sages must be proactively designed, and deliveredAs such, Southwest appears to be an appropriate frequently and consistently through all message Table 1 Southwest Airlines accomplishments Year Award Sponsor 2004 Top Performing Companies Aviation Week and Space Technology 2004 Performance Through People The Forum for People Performance and Measurement (2005) 2003 America’s Top Ten Admired Companies Fortune 2003 Airline of the Year Air Transport Magazine 2003 Corporate Conscience Award for Community Social Accountability International Positive Impact 2003 Brand Keys Customer Loyalty Award Brandweek 2003 Most Pleasant Airline Babycenter.com 2003 Best Domestic Airline of the Year Travel Weekly 2003 World’s Most Socially Responsible Companies Global Finance Magazine 2003 Employer of Choice Among College Students Fortune 2002—2003 100 Best Corporate Citizens Business Ethics Magazine 2002—2003 Best Reputation among U.S. airlines Harris Interactive Inc. and the Reputation Institute 2002—2003 Airline of the Year Air Couriers Conference of America 2002—2003 Top 20 Companies for Leaders Chief Executive Magazine 2001—2004 The 50 Most Desirable MBA Employers Fortune 2001—2003 Best Low Cost Airline Official Airline Guide 2000—2003 Hispanic Corporate 100 HISPANIC Magazine 1997—2003 Most Admired Airline in the World Fortune 1972—2002 Best Performing Stock over the Thirty-year Money Magazine period from 1972—2002 Source: Southwest Airlines fact sheet bhttp://www.swamedia.com/swamedia/factsheet.html#RecognitionsN (Southwest Airlines, 2004).
Positioning Southwest Airlines through employee branding Sources/Modes Employee’s Outcomes of Messages Psyche Internal • Position of Formal Organization and - Human Resource its Offerings in Knowledge Management Customers’ Minds of Desired Systems Brand ImageOrganization’s Desired - Public Relations Employee • Turnover Mission & Brand Systems Brand Values Image Informal Image • Employee - Culture/Coworker Satisfaction Influence Psychological - Leaders/Managers Contract • Customer Satisfaction External Formal • Customer Loyalty -Advertising & PR Informal • Favorable -Customer Feedback Reputation Feedback Adapted from: Miles, S. J., & Mangold, G. (2004). A conceptualization of the employee branding process. Journal of Relationship Marketing, 3 (2/3), 65-87. Figure 1 A conceptualization of the employee branding process. 537
538 S.J. Miles, W.G. Mangoldchannels if the employee branding process is to As previously noted, Southwest Airlines is awork effectively. highly respected and successful organization. A Effective and consistent transmittal of messages number of companies have studied Southwestreflecting the organization’s mission and values will and have met with varying degrees of successaccomplish two things. First, it will enable employ- as they attempted to replicate its best practicesees to know, understand, and experience the in their own operations. Our contextual analysis ofdesired brand image. Second, it will uphold the Southwest’s use of the employee branding processpsychological contract that exists between the to position the organization and its offerings inorganization and the individual employee. As customers’ minds is intended to demonstrate howRousseau (1995) explains in Psychological Contracts employee branding can contribute to a sustainablein Organizations: Understanding Written and Un- competitive advantage for the organization.written Agreements, the psychological contract isa perceptual agreement formed in employees’minds about the terms and conditions of the 3. The positioning of Southwest Airlinesworking relationship. It is a central component of through employee brandingemployee motivation and organizational life, in The concept of bpositioningQ relates to the waygeneral. customers perceive products, services, or organiza- The psychological contract is also central to the tions. Employee branding and positioning areemployee branding process, in that the degree to inextricably linked when customers perceive thatwhich organizations uphold the psychological the firm’s employees are closely connected to itscontract influences employees’ trust in their offerings. Therefore, employee branding is centralemployers and their motivation to serve custo- to effective positioning strategies when the goal ismers and co-workers. It also impacts their inter- to position an organization, a service, or a productactions with others, as well as their day-to-day that is augmented with a service component. Toproductivity. Even though the formation of the clarify this relationship, the use of the employeepsychological contract is an individualized percep- branding process to effectively position the South-tual process, it is important to note that organi- west Airlines organization and its service offeringszations can shape employee perceptions and, is discussed, with key success factors italicized.hence, the foundation on which the psychologicalcontract is built. 3.1. Organizational mission and values Organizations build employees’ knowledge andunderstanding of the desired brand image and During her presentation at the 2000 Society forinfluence the basis on which the psychological Human Resource Management International Confer-contract is built by consistently and frequently ence, Libby Sartein, Vice President of People atsending messages with mission- and value-based Southwest, pointed out that a high level of customercontent. Inconsistent messages may result in con- service is a key component of Southwest’s mission,fusion for employees and create a perception of and the value placed on customer service is virtuallyduplicity on the part of the organization. In fact, unquestioned by the company’s employees (Sartein,inconsistent messages are likely to result in a 2000). This customer orientation is reflected clearlyviolation of employees’ psychological contracts in Southwest’s mission statement, which can beand negatively influence employee turnover, pro- found on their website (Southwest Airlines, 2003):ductivity, and loyalty. The employee branding bThe mission of Southwest Airlines is dedication toprocess allows the organization to positively influ- the highest quality of Customer Service deliveredence and manage this perceptual exchange. with a sense of warmth, friendliness, individual Employees who receive frequent and consistent pride, and dCompany SpiritTQ (http://www.messages will understand, experience, and be southwest.com/about_swa/mission.html).motivated to project the desired brand image to Interestingly, though, the foundation of South-others. The position the organization and its west’s corporate message is not that customers areofferings have in the minds of customers becomes number one; rather, employees always come firsta source of sustainable competitive advantage with the company, with customers a respectedwhen the desired brand image is consistent with second. Southwest, in turn, expects its staff tothe image customers perceive. Successful employ- extend customers the same level of warmth,ee branding efforts also result in reduced employee respect, and responsiveness they, themselves,turnover, enhanced employee satisfaction, higher receive. This approach stands in stark contrast tolevels of customer satisfaction and loyalty, and a the bcustomers firstQ approach taken by mostfavorable reputation among stakeholders. service-oriented organizations.
Positioning Southwest Airlines through employee branding 539 The centrality of customer service to the South- 3.2. Desired brand imagewest mission has motivated the company to identifykey drivers of customer service and focus its Desired brand image refers to the conceptualiza-operational efforts on those drivers. In their tion organizations want customers to have of them.California Management Review article, Ford, Hea- Southwest Airlines clearly articulates its desiredton, and Brown (2001) pointed out that Southwest, brand image to employees, as well as customers, onthrough extensive research, found on-time flights a daily basis. In fact, publicly available on itswith friendly service and low fares drove customer website is Southwest’s formal Customer Servicesatisfaction. The company’s leadership then used Commitment Agreement, which spells out thethose drivers to guide its strategy for positioning company’s pledge to provide safe, affordable,the organization in customers’ minds. Thus, reliable, timely, courteous, and efficient air trans-breliable,Q bfriendly,Q and blow-pricedQ became the portation (Southwest Airlines, 2005). It also letsfocus of Southwest’s positioning strategy. customers know what to expect when things do not Southwest’s value system enables the company go well; for example, the necessity of overbookingto deliver the high levels of customer satisfaction is explained, and customers are clearly told what topromised in its mission statement. These values expect if they should be bumped from their flightsare articulated in the 1995 Southwest Airlines due to the practice.video, bKeeping the Spirit AliveQ, (Southwest Air- As pointed out in Nuts (Freiberg & Freiberg,lines, 1995) as well as in the book, Nuts (Freiberg 1996), the desired brand image is brought to life at& Freiberg, 1996). They include fun, love (or Southwest through the terms bpositively outra-bluv,Q in Southwest’s parlance), team spirit, and geous serviceQ and bSouthwest Spirit.Q These termsaltruism (building warmth and respect among were coined to communicate what employees wereemployees, customers, and the community). Sup- expected to deliver, and how they were expectedporting values that are deemed necessary to to deliver it. Thus, the brand image desired ofdeliver Southwest’s mission include profitability, Southwest employees is one of bpositively outra-cost-efficient operations, family, hard work, indi- geous serviceQ provided in the bSouthwest SpiritQ.viduality, ownership, egalitarianism, common This clear articulation of the desired brand imagesense, and simplicity. packages the company’s mission and values in a way Southwest’s service-oriented environment is or- that is easy for employees to internalize and retain.chestrated by the factors just discussed: the clear It also defines the manner in which staff membersstatement of Southwest’s mission, discovery and are expected to deliver customer service. There-articulation of the factors that drive customer fore, Southwest’s employees know they will besatisfaction, and the implementation of a value expected to deliver outstanding service to everyonesystem that enables staff members to deliver high with whom they come into contact, and understandlevels of customer service. Employees working in what that means in terms of their individualthis environment feel empowered to solve custom- behavior. They also know they can expect otherer problems, are extremely motivated to do what is Southwest teammates to treat them just as well asin the best interest of customers, and know their they treat their customers, as bpositively outrageousefforts will be supported and rewarded. Their serviceQ and the bSouthwest SpiritQ apply to inter-positive feelings and high levels of motivation, in actions between employees, too.turn, lead to operational efficiency. This opera- The messages communicated through South-tional efficiency, combined with a service-oriented west’s organizational systems are carefullyenvironment, enables Southwest to pursue a posi- designed to articulate and reinforce the desiredtioning strategy based on the key drivers of brand image while reflecting the organization’scustomer satisfaction: affordable, safe, reliable, underlying mission and values. The delivery oftimely, courteous, and efficient air transportation frequent and consistent messages that reflect theand baggage handling service. desired brand image is a key success factor in The articulation and reinforcement of the com- Southwest’s use of employee branding to positionpany’s mission and values are a key success factor the organization and its offerings in the minds of itsin Southwest’s use of the employee branding customers. The sources and modes of those mes-process to position the organization and its offer- sages are discussed next.ings in customers’ minds. Frequent and consistent 3.3. Sources/modes of messagesmessages serve the dual purpose of communicatingand underpinning the desired brand image while If employees are to project a positive image, theyinfluencing and reinforcing employees’ psycholo- first need to know and experience the desiredgical contracts. brand image, and understand that it is a natural
540 S.J. Miles, W.G. Mangoldoutgrowth of the organization’s mission and and for relaying to employees the things thevalues. Furthermore, they must be motivated to organization deems important. As Jody Hofferproject the desired brand image to others. At Gittell (2003) points out in her book, The SouthwestSouthwest, careful attention is paid to ensure the Airlines Way, Southwest’s pay scale is comparablemessages emanating from all organizational sys- to that of its competitors. However, Southwesttems align with the company’s mission, values, and pilots are paid by the flight rather than by the hour.desired brand image. This alignment of messages Like other employees, they also have stock optionsacross organizational message systems is a key and profit sharing, which serve as incentives andsuccess factor in Southwest’s use of the employee create a sense of ownership in the company.branding process to position the organization and Consequently, Southwest pilots take cost-efficiencyits offerings in its customers’ minds. The various very seriously. It is not uncommon for Southwestmessage sources at Southwest are highlighted pilots to ask for runways that are closer to thebelow. hanger or request a different altitude in order to save fuel or time. Pilots also share cost-saving3.3.1. Formal internal sources insights in the monthly company newsletter, LuvMany of the formal messages at Southwest are Lines. These insights help other Southwest pilotscommunicated through the human resource man- deliver high quality service, while minimizing costsagement and public relations systems. The mes- to the organization.sages sent by the human resource management Southwest’s performance management system issystem (i.e., bPeople DepartmentQ) clearly rein- used to align employee behaviors with organiza-force the organization’s commitment to its tional goals. This reinforces the desired brandemployees and to customer service. They also image and other organizational messages by relat-reinforce the values of fun, love, and teamwork. ing to employees that while the company cares forThese themes are also clearly communicated in them, it expects hard work and high levels ofadvertisements and other communications customer service. Southwest sometimes letsdesigned to attract employees to the organization. employees know how much they are cared for byFor example, according to Nuts (Freiberg & stepping in and helping individual employees,Freiberg, 1996) and the article by Justin Martin financially or otherwise, in their times of need. In(2004) in Fortune Small Business, one company fact, the level of responsiveness and compassionrecruitment ad communicated a desire for seen inside Southwest is virtually unheard of todayemployees to color outside the lines, or operate in corporate America.in a manner that is a bit off-center. Like all companies, however, Southwest some- Prospective employees are carefully screened times has employees who hurt the company’sduring the recruiting and selection process to performance on a consistent basis. Human resourceensure their attitudes and personal values are mechanisms such as performance evaluations,consistent with the organization’s values and meetings with supervisors, and continuing trainingdesired brand image. For instance, Southwest does provide these employees with opportunities tonot hire applicants who are not viewed as team correct their behavior. Those unwilling or unableplayers; those uncomfortable with the company’s to improve their performance after having beenvalues are encouraged to self-select out of the given opportunities to develop will find themselvesrecruitment process. displaced. Southwest’s training and development efforts Southwest also uses its public relations system toare designed to clarify and reinforce the behaviors help employees internalize the company’s missionand values the organization reveres. The training and values. For example, Luv Lines consistentlyavailable through the company’s University for reinforces corporate values. In one issue, it usedPeople enables employees to identify with the the metaphor of geese migration to emphasize theorganization, its culture, and its values, in addition importance of teamwork. In other instances, itto providing the basic knowledge and skills needed relates stories that focus on how individual employ-for the job. Other training is designed to orient ees have performed heroic acts of customeremployees to the Southwest Spirit through such service, or behaviors that are otherwise consistentvideos as bKeeping the Spirit Alive.Q Extensive job with the company’s values.training occurring in the employees’ departmentsemphasizes leadership, personal development, and 3.3.2. Informal internal sourcesthe delivery of positively outrageous service. The importance of the informal messages that flow Compensation is also a powerful tool for sending between employees, supervisors, and friends atmessages that reinforce the desired brand image Southwest is well known, and efforts are made to
Positioning Southwest Airlines through employee branding 541ensure these messages support the company’s Southwest to reinforce the organization’s missionpivotal values. Southwest understands that the and values.formation and reinforcement of appropriate em- Public relations efforts create a caring image,ployee behaviors is heavily influenced by organiza- which is demonstrated through actions. Southwesttional culture. The culture, in turn, influences and recently took initiatives to help active duty soldiersis influenced by the interactions that occur be- reunite with their families by offering discounts andtween coworkers. Southwest takes advantage of waiving advance purchase requirements. The com-this culture—coworker interaction through the use pany was also awarded the 2001 Employer Supportof planned, coordinated activities and messages Freedom Award, which is presented annually by thethat are consistent with Southwest’s mission and Secretary of Defense in recognition of the nation’svalues. top companies that provide support above and The company’s informal messages are, to some beyond what is required by law to their Nationalextent, formalized through its Culture Committees, Guard and Reserve employees.which work to foster the Southwest culture and Like most organizations, Southwest uses adver-promote company values such as profitability, hard tising to attract customers. However, it also useswork, low cost, love, and fun. Culture Committees advertising to communicate its mission and valuesare established in each Southwest location, with to employees, and to demonstrate consistencythe national committee made up of representatives between the messages delivered to customers andfrom the local committees. In the words of Colleen those delivered to staff. For example, during herBarrett, the Culture Committees benhance culture presentation at the 2000 Society for Humanwhere needed, fix culture if it is broken, and create Resource Management Conference, Libby Sarteinculture in new places to help employees learn the described how the company used an ad campaignSouthwest way of lifeQ (C. Barrett, personal com- with the theme bSouthwest is a Symbol of Free-munication, October 9, 2003). dom.Q The campaign targeted external audiences, Informal messages are also communicated and communicated that Southwest’s low faresthrough the interactions of employees with their allow people to travel to places they would notleaders. Great care is taken in selecting South- otherwise be able to afford and do things theywest’s first line supervisors, as they are seen as would not otherwise be able to do (Sartein,the organization’s ambassadors to its most impor- 2000). A parallel internal promotional campaigntant organizational constituent: its employees. also focused on freedom. This one, titled bAtThese supervisors are encouraged to make sure Southwest, Freedom Begins with Me,Q translatedtheir communications consistently reflect the the extrinsic and intrinsic benefits of working atorganization’s mission and values, as well as the Southwest into eight employee freedoms, such asunderlying principles of integrity and caring for the freedom to blearn and growQ through personalstaff. Southwest’s bopen doorQ policy invites and professional development.employees to go to higher levels of managementwhen they feel that the organization’s mission, 3.3.4. Informal external sourcesvalues, and underlying principles are not being Informal external messages often come in the formupheld by their immediate supervisors. This ap- of customer feedback and word-of-mouth commu-proach to organizational leadership results in nications. At Southwest, word-of-mouth communi-employee empowerment, and appears to contrib- cation is widely understood, and is even addressedute to employees’ personal fulfillment and com- in the company’s internal communications. Asmitment to the organization. In fact, it has led to highlighted in Nuts (Freiberg & Freiberg, 1996),union negotiations that eliminate rigid work rules mathematical computations were featured in theand job descriptions, thereby allowing staff mem- company newsletter to illustrate how many custo-bers to fix or deal with customer problems as they mers could potentially be lost as a result of one badoccur. service incident, due to the negative word-of- mouth that is likely to result.3.3.3. Formal external sources Customer letters, both good and bad, are alsoAdvertising and public relations are formal mes- widely shared with employees. When bad servicesage sources normally associated with communi- events occur and are reported, the employee orcations directed to external audiences. However, employees involved are contacted for their insightsemployees and other internal constituents are into the cause of the problem, and possiblealso recipients of these messages; therefore, solutions to prevent such a recurrence. Whileadvertising and public relations efforts are uti- complaints are addressed and attempts are madelized as part of the employee branding process at to appease disgruntled customers, these do not
542 S.J. Miles, W.G. Mangoldnecessarily come at the expense of the employee. Consistently communicating the company’sThis manner of responding to and passing on mission, values, and desired brand image enablescustomer feedback sends an important message to employees to know and understand the visionemployees: employees are first, and customers are they are to project to others. Upholding employ-second. It is never forgotten, however, that ees’ psychological contracts is crucial in obtain-employees are expected, in turn, to treat their ing a positive emotional connection that willcustomers like the company treats them: as though motivate them to internalize and deliver on thethey were first. desired brand image. Thus, developing employ- In summary, clear communication is essential ees’ knowledge and understanding of the desiredto building and maintaining employees’ knowl- brand image while shaping and upholding theiredge and understanding of the desired brand psychological contracts is key in the use of theimage, and motivating them to project that employee branding process to position Southwestimage to others. Southwest has been particularly and its offerings in the minds of its customers.successful at delivering parallel messages, whichcarry the same theme, regardless of the intended 3.5. Employee brand imageaudience. The employee brand image refers to the image employees project to those around them. The3.4. The psychological contract employee brand image is likely to be aligned with the desired company brand image when employeesAn employee’s knowledge of the desired brand know and understand the desired brand image, andimage and their willingness to project it to others are sufficiently motivated to project it to others.resides in their psyche. As previously illustrated, An organizational position is created in the minds ofSouthwest makes a great effort to ensure its customers, fellow employees, and other stake-messages are based on the company’s mission and holders when this alignment is consistentlyvalues, and that they are delivered consistently and attained. Such positioning is difficult to achieve,frequently. These efforts effectively develop and few organizations are successful in doing so.employees’ knowledge and understanding of the When it is accomplished, however, it becomes adesired brand image. source of sustainable competitive advantage for The term bcovenantQ is used frequently at the organization.Southwest, and is fairly synonymous with the term As discussed previously, Southwest takes a two-bpsychological contract.Q Southwest’s psychological pronged approach to managing the employeecontracts (i.e., covenant relationships) provide brand image. First, it develops employees’ knowl-guidelines for employees regarding both what is edge and understanding of the desired brandexpected from them and what they can expect in image by sending frequent and consistent mes-return. This fulfillment of employees’ psychological sages. These messages communicate what beha-contracts has enabled the company to enjoy an viors are appropriate and what responses areenormous amount of trust on the part of its staff. It suitable for a given situation. Second, Southwesthas also contributed to highly motivated workers motivates its employees to deliver the desiredwho have strong drives to deliver the desired brand brand image by ensuring their psychological con-image to those with whom they come into contact. tracts are upheld. The upholding of psychological The extent to which the psychological con- contracts is rooted in the practice of consistentlytracts of new Southwest employees have been basing all organizational messages on the compa-upheld is assessed through a process that is, to ny’s mission, values, and desired brand image.some extent, formalized. Staff members who Southwest’s consistent message-sending (formalhave been with the company 9 months or less and informal, internal and external) aligns theare randomly selected and invited to have lunch employee brand image with the desired brandwith Colleen Barrett and other Southwest execu- image, and effectively positions the organizationtives. The informal conversations surrounding and its service offerings in the minds of itsthese luncheons are intended to provide insight customers. This use of consistent messages tointo just how well the new employees’ expecta- effectively manage the employee brand image is ations have been met (i.e., their psychological key to Southwest’s employee branding success.contracts have been upheld). Information is alsosought regarding where the company may be 3.6. The fruits of employee branding laborsgoing wrong and ways in which the recruitment,selection, training, and orientation processes may Effective employee branding programs have severalbe improved. favorable consequences. First, they enable organi-
Positioning Southwest Airlines through employee branding 543zations and their offerings to be effectively posi- contracts suggest that union employees have a hightioned in the minds of customers and other level of trust and confidence in the company and itsorganizational stakeholders. Effective employee willingness to treat them well.branding programs also result in increased employ- Southwest’s effective use of employee brandingee satisfaction and reduced staff turnover. Compa- has also contributed to high levels of customernies engaging in successful employee branding satisfaction. Southwest’s customer relations de-efforts are also likely to benefit from higher levels partment reports that it receives, on average, lessof customer satisfaction and loyalty, and a favor- than one complaint for every 10,000 passengersable overall reputation because the desired brand boarded. The American Customer Satisfactionimage is being consistently reflected by employees. Index (Transportation/Communications/Utilities These outcomes are clearly present at Southwest. and Services, 2005) indicates that Southwest, withThe company and its offerings have attained a a customer satisfaction score of 73, has signifi-favorable position in customers’ minds. bPositively cantly higher levels of customer satisfaction thanoutrageous serviceQ is perceived to be delivered in the other major airlines reported. Southwest’sthe bSouthwest Spirit.Q The consistency with which scores are consistent with those of the smallerthis image is reflected among employees was airlines that are consolidated into the index’srecognized when the company received the 2003 botherQ category. Similarly, the United StatesKozmetsky Award for Branding Excellence in the 21st Department of Transportation’s Air Travel Consum-Century. One member of the panel of judges er Report (2004) indicates that Southwest was theindicated Southwest stood out from its competition number two U.S. airline for the period Januarybecause the brand image was consistently reflected, through September 2004, with only 0.19 com-from baggage handlers to executive offices to the plaints per 100,000 enplanements; ExpressJet Air-organization’s ethical underpinnings (University of lines was number one with 0.13 complaints, andTexas at Austin, 2003). JetBlue Airways was number three with 0.30 In 2004, the Medill School of Journalism at complaints.Northwestern University recognized the extent to Southwest’s use of the employee branding pro-which Southwest delivers bpositively outrageous cess has also contributed to high levels of customerserviceQ in the bSouthwest SpiritQ with its Perfor- loyalty. Southwest was tied with JetBlue for firstmance Through People Award. This award is based place in the airlines category of the Brand Keyson a number of factors, including service to Customer Loyalty Award for 2003, and was secondcustomers, the employer’s human resource initia- to JetBlue for 2004 (BrandKeys, 2004). The annualtives, the alignment of internal and external Brand Keys Customer Loyalty Awards are based on amarketing initiatives, and the link between people series of surveys that probe customers’ relation-performance management and profit. ships with 182 brands in 31 different categories. Southwest also enjoys the lowest employee Finally, Southwest enjoys a favorable reputationturnover rate and the highest level of employee in the business community, which appears to besatisfaction in the industry. According to Colleen largely attributable to its effective use of employeeBarrett, Southwest’s employee turnover is consis- branding to position the organization. Businesstently under 5%, with 4.59% for the years 2003 and Ethics magazine rated Southwest Airlines among2004. In an article in Fortune magazine, Nicholas its 100 Best Corporate Citizens for the years 2000Stein (2000) indicates that the average turnover through 2004; in fact, it is the only airline to everrate for the airline industry is 20 to 30%. Jet Blue, be included on the list. The Business Ethics rankingsSouthwest’s closest market competitor, has a turn- were compiled by KLD Research and Analytics ofover rate of 10 to 12%, according to a Workforce Boston, with companies scored based on theirManagement article by Eve Tahmincioglu (2004). service to various groups, including employees, Each year, Fortune magazine conducts random customers, and shareholders. Fortune magazinesurveys of employees to compile its list of b100 Best has also, for the eighth year in a row, recognizedCompanies to Work for in America.Q Southwest Southwest in its Annual Survey of Corporateranked in the top five of the 100 best companies Reputations. The survey identified Southwest asfor the years 1997, 1998, 1999, and 2000. Interest- number two among America’s most admired cor-ingly, the company chose not to devote the porations for 2003. In addition, Southwest wasresources necessary to participate in the bbest identified as the most admired airline in the worldcompaniesQ survey process after the year 2000. for the years 1997 through 2003. Factors consideredSouthwest’s high level of employee satisfaction is in Fortune’s rankings included the ability toalso reflected in the fact that its union contracts attract, develop, and keep talented people, theare of very long duration. In general, long-term quality of the organization’s products and services,
544 S.J. Miles, W.G. Mangoldthe quality of management, community and envi- both employees and customers. As previouslyronmental responsibility, and financial soundness. indicated, Colleen Barrett and other executives Southwest, like most other organizations, also have luncheons with new employees to monitorassesses its operational performance outcomes whether their work-related expectations have beenwith a variety of productivity metrics that are met. When this is not the case, corrective action isspecific to the company and industry. For example, taken to the fullest extent possible. In thosethe percentage of departures that are bon-timeQ is instances where corporate messages have createdclosely monitored at Southwest and other airlines. unrealistic expectations, efforts are made to iden-Turnaround time, the time between an airplane’s tify the source of the miscommunication and adjustgate arrival and departure, is also carefully scruti- the messages accordingly.nized. As pointed out in the book, Nuts (Freiberg & Southwest’s open door communication policyFreiberg, 1996), efficient turnaround times require enhances feedback from employees at all levels ofhigh levels of coordination between boarding the organization. Staff are allowed and encour-personnel, flight attendants, baggage handlers, aged to express their concerns to managers,and pilots. Southwest’s 20-min average turnaround regardless of the manager’s level in the organiza-time is the lowest in the industry by far, with 60% of tion; even Colleen Barrett has an open door policythe airplanes leaving within 15 min of arrival. These for all employees. Corrective action is taken whenhigh levels of bturnQ translate into financial bene- managers feel the organization has created anfits, as they enable Southwest to serve its markets injustice. In cases where managers feel thewith fewer airplanes and fewer gates. employees’ viewpoints are not supported, expla- The continuous monitoring of outcomes pertain- nations are given as to why the organization acteding to such variables as employee satisfaction and as it did. The process of continually using feed-turnover, customer satisfaction and loyalty, its back from customers and employees is yet anotherreputation in the business community, and its key success factor in Southwest’s use of theinternal performance metrics has enabled South- employee branding process to position the organi-west to build on its employee branding strengths zation and its offerings in the minds of itsand to identify and address employee branding customers.problems while they are in their early stages. Thus,the continuous monitoring of outcomes is another 4. A final wordkey success factor in Southwest’s use of theemployee branding process to position the organi- Organizations are continually seeking ways tozation and its offerings in its customers’ minds. retain customers and build brand loyalty by en- hancing their images. A premise of this article is3.7. Feedback that employees vividly project an organizational image to customers and other constituents. Wheth-The feedback loop is a critical component of the er the image is positive or negative is critical to theemployee branding process. It allows organizations effective positioning of most organizations, espe-to monitor the consequences of the process and to cially those in the service sector.identify areas for improvement. Failure to achieve Our analysis of Southwest Airlines provides evi-desired consequences suggests that the process be dence that the employee branding process can bere-examined for deficiencies in message design used to effectively position the organization in theand delivery. Fortunately, many of the conse- minds of customers and other stakeholders. For thisquences of the employee branding process are to happen, the mission and values must be carefullyreadily observable and measurable. Statistics thought out, and should give rise to the desiredpertaining to employee turnover are available brand image. The messages emanating from thethrough the organizations’ human resource organization’s message systems should be proac-departments. Accolades from the financial sector tively designed to reflect the desired brand image,and from industry and customer groups are as well as the behaviors and attitudes the organiza-another form of feedback. Validated scales are tion expects and rewards. Then, the messagesavailable to assess employee and customer satis- should be delivered frequently and consistently.faction, as well as customer perceptions of service Southwest Airlines’ successful use of employeequality. Even word-of-mouth communications (ei- branding to effectively position the organizationther internal or external to the firm) can be and its offerings has been described in thisassessed with reasonable accuracy. analysis. Other organizations can glean the bene- Southwest works very hard to gain feedback by fits of employee branding by following Southwest’smonitoring its outcomes, as well as the pulses of example.
Positioning Southwest Airlines through employee branding 545References Southwest Airlines. (2004). Fact sheet. Retrieved January 5, 2005, from http://www.swamedia.com/swamedia/BrandKeys. (2004). 2004 Brandweek customer loyalty awards. factsheet.html Retrieved from, http://www.brandkeys.com/awards/ Southwest Airlines. (2005). Customer service commitment index.cfm agreement. Retrieved from http://www.southwest.com/Ford, R. C., Heaten, C. P., & Brown, S. W. (2001). Delivering about_swa/customer_service_commitment/customer.pdf excellent service: Lessons from the best firms. California Stein, N. (2000). Winning the war to keep top talent. Fortune, Management Review, 44(1), 39 – 56. 141(11), 132 – 136.Freiberg, K., & Freiberg, J. (1996). Nuts. Austin, TX7 Bard Press. Tahmincioglu, E. (2004). Keeping spirits aloft at JetBlue.Gittell, J. H. (2003). The Southwest Airlines way. New York7 Workforce Management. Retreived on January 5, 2005, McGraw-Hill. from http://www.workforce.com/section/o6/article/23/Martin, J. (2004). Dancing with elephants. Fortune Small 90/36 Business, 14(8), 84 – 90. The Forum for People Performance Management and Mea-Miles, S. J., & Mangold, G. (2004). A conceptualization of the surement. (2005). About us. Retrieved from http://www. employee branding process. Journal of Relationship Market- performanceforum.org/PFM/about.asp#4 ing, 3(2/3), 65 – 87. Transportation/Communications/Utilities and Services. (2005).Rousseau, D. (1995). Psychological contracts in organizations: American customer satisfaction index. Retrieved January 4, Understanding written and unwritten agreements. Thousand 2005, from http://www.theacsi.org//first_quarter.htm Oaks, CA7 Sage Publications. University of Texas at Austin. (2003). College news: SouthwestSartein, L. (2000, June). Internal branding at Southwest Air- Airlines receives first Kozmetsky Award for Branding Excel- lines. Presented at the Society for Human Resource Manage- lence. Retrieved March 3, 2004, from http://communication. ment International Conference, Las Vegas, NV. utexas.edu/news/archives/2003/kozmetsky_award.htmlSouthwest Airlines (Producer). (1995). Keeping the Spirit Alive U.S. Department of Transportation Office of Aviation Enforce- [Motion picture]. (Available from Southwest Airlines, ment and Proceedings. (2004, November). Air travel con- Dallas, TX.) sumer reports. Retrieved December 15, 2004, from http://Southwest Airlines. (2003). Our mission. Retrieved March 3, airconsumer.ost.dot.gov/reports/atcr04.htm 2003, from http://www.southwest.com/about_swa/mission. html