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Performance Management and Southwest Airlines

Essay by   •  May 13, 2012  •  Case Study  •  1,841 Words (8 Pages)  •  2,783 Views

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Nowadays organizations operate in an increasingly complex environment, characterized by the globalization of trade, important improvements in technology, as well as radical changes in the social framework. Now, in this environment, competitiveness of a business largely depends on its ability to manage organizational performance as it is related to their ability to align or adjust their strategies and structure to environmental change. Performance management should be at the heart of the business processes of the human resources of any business. The creation and implementation of a comprehensive and consistent performance management enables HR departments to align sector managers and employees to the business goals. (Human Resources at UC Berkeley) A crucial factor in today's organizations is to integrate the human dimension in its strategic choices. Clearly organizations are about people, Andrew Carnegie (1835-1919), a business magnate and philanthropist steel tycoon plainly shows the importance of the labor factor by stating "Take away my people but leave my factories and soon grass will grow on the factory floors. Take away my factories but leave my people and soon we will have a new and better factory" (McShane and Von Glinow). Men and Organizations make the difference, and it is towards this way that human resource management tries to exploit the fruits of labor productivity.

For over 30 years, the success of Southwest Airlines is obvious. After some difficult years in its infancy, the company founded in 1967 quickly became a major player in the U.S. market. This success is based on a very distinct human resources policy.

In this paper I will show the important role of leadership, organizational culture and human resource management in managing the performance of the organizations workforce. Then by examining the achievements of Southwest airlines, a company that earned its competitive advantage through its human resource policy, the paper will show how an effective performance and human resource management can lead an organization towards greater success.


"The HR function is not only humanitarian. It serves the goals of the company. In this sense, it is at the heart of corporate strategy." (Preview of "Personnel Journal - ANDCP)

In fact the primary objective of a business is to ensure its sustainability. HRM is one of the pillars that will help achieve this goal. In other words, the application of organizational behavior theories and human resource management processes can enhance organizational effectiveness and achieve strategic objectives. To manage the performance of the workforce it is important to base the analysis on the roles of leadership, organizational culture and human resource management.

1) The role of Leadership

Leadership is essential for managers, especially with globalization and decentralization of the decision-making authority of managers in medium and large enterprises. This mechanism of globalization means that the ability to conduct business without having in hand the power to bring people together and direct them towards a direction would be almost impossible. The effectiveness of the method used by the leader in a particular situation may vary according to circumstances. Leadership could be defined as the function of guiding and influencing others to bring them to meet ambitious targets. But also the function of a leader is to coach individuals in order to help them achieve their duties. In essence, the leader should help preserving the business, shaping the organization culture and finally developing as well as proposing future goals. In this context, the ideal leader should respond to different qualities both in human and organizational. (Isaksen, Scott G. 2009)

2) The role of Organizational Culture

Organizational culture helps maintain cohesion by uniting the workforce around one concept that could be a main motivational factor. Corporate culture is indeed a complex part in any organization which allows each individual to identify with it. In other words, by being a promoter of the organization's values, it echoes to the aspirations of the individuals to realize their potential: their self-actualization (Maslow's theory of needs). The corporate culture is in some sense, a by-product of culture national and therefore a set of values, rituals, and signs shared by the majority of employees.(D. Douglas Caulkins) In an interview, Steve Jobs stated [when it comes to recruiting new employees] "the real issue for me is, Are they going to fall in love with Apple? Because if they fall in love with Apple, everything else will take care of itself". (AMBLER). Clearly when the workforce is aligned with the organization's culture and considers that the company's prosperity is the same as theirs, the strategic goals are easier to achieve. Thus successful companies must shape a strong culture.

3) The role of Human Resource management in performance

Human resource management is the set of functions and measures aimed at mobilizing resources and developing staff for greater efficiency, productivity for the benefit of an organization. Human resources, the Human capital of any organization, provide strategic advantages. Firstly they increase the efficiency and efficacy of the company; per example a specific competency can help reduce costs, increase productivity and provide a competitive advantage. A successful human resource strategy will provide the optimal conditions to the employees and by suppressing unwanted behaviors can help a company achieve its goals. Human resources consist of a policy that relies on the acquisition, use and development of the human element towards the goals of the company with more efficiency and efficacy. (David Lewin)




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