The airline industry has been in the news quite a bit recently, and not for the best of reasons. Although carriers and circumstances vary, one could make the argument that they all share something in common.
Sure, there are the normal stresses of air travel. But from an organizational perspective, there are breakdowns in the customer experience that could be attributed, either in whole or in part, to upstream breakdowns in the employee experience.
This is what makes the most recent news item all the more surprising.
To briefly summarize, the management of one airline decided to increase the pay of their pilots and flight attendants, ahead of planned negotiations (unrelated to the events mentioned above). But that was not what made the event newsworthy. Instead, it was the angry reactions of shareholders and investors to that news, ultimately sending the share price down.
The story reignites an interesting debate around the path to organizational success, with strong views on both sides. The airline CEO attributes the move as being necessary to build trust and encourage a more engaged workforce, critical factors for succeeding in a service industry. Financial analysts see it as wasteful spending, detracting from the value of the business.
Acknowledging that a balance between these forces is necessary, I also believe in the power of the employee experience to achieve both sets of goals. For example, research has found the employee experience contributes to higher reported performance, more discretionary behaviors, and fewer intentions to leave. These are often behaviors that benefit the business and customers alike.
In the short term, employees take better care of customers when they themselves are taken care of. In the long term, I suspect the cumulative effect of those interactions contributes to a more resilient and successful business that can create value for all stakeholders.
A further implication of the current debate is the need for innovation in organizational practices and compensation philosophies, as a complement to cultivating the employee experience. Parity of base pay is clearly important, but there are additional levers that could add much needed efficiency to the broader portfolio (and perhaps address the concerns of management and shareholders alike).
Social recognition is one of those unique levers, offering a method of performance-aligned pay, act as a driver of the employee experience, and empower colleagues and peers to “catch” those behaviors that drive the customer experience. Embedded within a culture of recognition, those spirals of positive employee and customer experiences can deliver competitive advantage that can make everyone happy.
What’s your take on the role of the employee experience?
As Globoforce’s Vice President of Client Strategy and Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. He is the co-author of "The Power of Thanks" and his articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.
Derek reminds us that recognition is designed to be public. Few tools in our total reward workbox permit open disclosure and even group celebration.
Interesting, too, that he described a situation where a well-intentioned attempt to improve morale and increase engagement got pushback from owners. That is precisely why the vast majority of firms that have created and implemented effective pay equity programs to eliminate historic systemic bias against protected classes have "kept it secret." Spending money "unnecessarily" upsets shareholders. Besides, it just attracts lightning to brag about how fairly you pay everyone!
Much simpler to publicly celebrate success with nonmonetary reinforcements.
Posted by: E. James (Jim) Brennan | 05/01/2017 at 01:09 PM