Airline Employee Relations 101
When managers treat their employees poorly, companies begin to crumble. The real strength of a corporation lies not in its executives nor in its workers, who day after day create a product or provide a service that has value. The real magic of any company lies in the dynamic between those who do the basic work and those who manage them.
Management’s job is to organize its workers to accomplish a mission. Workers are responsible to work hard. In return, workers entrust managers with the responsibility of organizing their lives, parceling out their time, investing their pension funds wisely and paying their payroll. Faith in their leaders allows workers to go about their everyday jobs with commitment, care and purpose.
The American worker’s basic instinct is to trust his leaders. It’s that trust between executives and workers that allows companies to function. When that trust is broken, when the balance between the executives and the workers becomes unevenâ€â€lopsided? unhinged?, organizations crack. In the airline industry, that fundamental trust has been broken, and the system is now out of whack.
United Airlines has abandoned its pension responsibilities. Northwest’s mechanics are about to go on strike. Delta is tiptoeing along the edge of bankruptcy. US Airways is a basket case being bailed out by America West.
The actions of some airline executives border on criminal. Some have been caught coloring the truth. Others are simply incompetent. Needless to say, at many of America’s largest airlines, confidence in today’s corps of airline executives is at an all-time low.
While some executives at Southwest, JetBlue and American Airlines are providing honorable and responsible leadership, executives at US Airways, Northwest and United appear to be raiding the corporate cookie jar even as they lay off workers in droves.
In a crisis of the executives’ own creation, they have the nerve to blame the workers. Worse, they pass the financial suffering that they have created on to their workers, while often paying themselves bonuses.
These kinds of management actions can’t help develop confidence.
According to Baseline magazine, the CIO at Northwest Airlines, Philip Haan, received $3,058,612 in total compensation last year. In 2003, his compensation was $1,915,587. Those salaries must certainly leave a sour taste for mechanics and flight attendants contemplating strikes at his airline.
US Airways executives argued in front of bankruptcy judges earlier this year that they need more funds for management retention. At the same time, they were firing workers and downsizing and outsourcing jobs they were responsible to protect.
Glenn Tilton, United Airlines’ CEO, received a bonus last year of $366,393; the company’s CFO, Jake Brace, got a bonus of $173,403. And what was the combined bonus for all United flight attendants during the same period? Zero.
And that’s not all. Even as they strip away pension programs paid for by their workers, airline executives seek to guarantee their own retirement funds. While United Airlines was forsaking its workers and reneging on its pension programs, CEO Glenn Tilton secured a retirement payment of $4.5 million.
What happened to the pension funds that airlines were supposed to be investing for their workers? That money was deducted from the workers’ salaries. Where did it go? Was it stolen? Why isn’t this considered a criminal action? Who is investigating?
Needless to say, a lot of airlines are in a heap of trouble. But just as there were airlines to emulate while the current airline financial crisis developed (for example, Southwest and JetBlue), there are some airline CEOs who seem to understand that the trust between airline executives and workers is sacred.
If more airline leaders would follow the examples of Gerard Arpey (American Airlines), Herb Kelleher (Southwest), Gary Kelly (Southwest), David Neeleman (JetBlue) and Gordon Bethune (Continental), the airlines would begin to regain the confidence and trust of their workers.